After a temporary beneficial supply shock hits the economy, general equilibrium is restored by
A) a shift down and to the left of the IS curve.
B) a shift to the left of the FE line.
C) a shift up and to the left of the LM curve.
D) a shift down and to the right of the LM curve.
D
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As disposable income ________, planned consumption expenditure ________ by a ________ amount
A) decreases; increases; larger B) increases; decreases; smaller C) increases; increases; larger D) increases; increases; smaller E) decreases; increases; smaller
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Refer to the graph shown. Assume that the market is initially in equilibrium at a price of $10 and a quantity of 500 units. If the government imposes a $4 per-unit tax on this product, equilibrium quantity will change to:
A. 500. B. 300. C. 1,000. D. 400.
Which of the following contributed to the emergence of hyperinflation in Germany in the early 1920s?
A) payment of massive war reparations required by the Versailles Peace Treaty B) huge budget deficits financed by printing paper money C) decreased desire to hold money on the part of the German people D) All of the above